Web3.0 Study Meeting (3rd)

Overview

Date and Time: October 21, 2022 (Friday) from 13:00 to 14:00
Location: Online
Agenda:

Opening
Proceedings
1. Explanation (Dear Emi Kusano)
2. Questions and Answers and Exchange of
3. Good digital award Digital Certificate (Secretariat)
Adjournment

Materials

Minutes

Date

October 21, 2022 (Friday) from 13:00 to 14:00

Location

Online Meetings

Attendees

Members

Jiro Kokuryo (Professor, Faculty of Policy Studies, Keio University)
ISHII Natsu Shori (Professor, Faculty of International Information Studies, Chuo University)
Joichi Ito (Director and Chief Architect of Digital Garage, Inc., Director General of the Innovation Center of Chiba Institute of Technology)
Yuko Kawai (CEO of Japan Digital Design Co., Ltd.; Executive Director of the Strategic Planning Department of Mitsubishi UFJ Financial Group, Inc.; Executive Director of the Strategic Planning Department of MUFG Bank, Ltd.)
Keiji Tonomura (Attorney, Nagashima, Ohno & Tsunematsu Law Office)
Taiyō Fujii
Shinichiro Matsuo, Research Professor, Georgetown University

Digital Agency (Secretariat)

Minister Kono, Parliamentary Senior Vice-Minister Okushi, Parliamentary Vice-Minister Ozaki, and other members of the

Minutes

Mr. Kusano explained the hearing with experts.

They launched a company called "Fictionera" in February of this year. The company's name comes from Fiction and Era, the story and the era. It is truly Web3.0, and NFT is the biggest fiction, and it is named with the hope that creators and users will spin stories together as a story that humanity can enjoy.
There are two members including me. My background is that I have been teaching concept work to students as a part-time lecturer at Tokyo University of the Arts for three years, appearing at overseas festivals such as SXSW as a musician, and creating art works as a media artist and exhibiting at SIGGRAPH.
The reason why I jumped into the world of NFT was last summer vacation, when my 8-year-old son said that he wanted to try NFT as a free research. At that time, I was researching NFT at a time when I was in a hurry because the place to make presentations was lost due to the pandemic, and I said, "I want to try it because I want to buy pokemon card." So, we started Collective NFT together. At present, more than 250 works are on OpenSea, and the total amount of distribution so far is 40 million yen, and some works have been purchased for up to 1.8 million yen on a standalone basis. This became a topic of conversation, and it was featured on TV about 40 times, and it is said that it triggered many creators to start NFT.
His son's work became a topic of conversation in the Discord community, where people who own NFTs can enter. He became famous in the DAO of Friends with Benefits (FWB), a token community of Web3.0 entrepreneurs, creators, and crypto and culture lovers, and Zombie Zoo's works sold out. Later, DJ Steve Aoki purchased the three works for a total of 2.4 million yen at the then-exchange rate, or 6 eth.
His son's works became a topic of conversation at NFT, and he struggled to collaborate in any way to increase the value of his works as public goods. At the request of Zombie Zoo, he asked a friend of Toei to make an animation of Zombie Zoo, and together with Toei Animation, he made the first Japanese animation NFT video. Based on the idea of the pandemic generation, he thought about how humans would coexist with zombies, and how to make vaccines and improve the world. He thought about the draft of the animation and made a promotional video.
In addition to the world of animation, it will collaborate with The Sandbox, the world's largest metaverse platform, as the first NFT IP in Japan, and will be released around next month or the month after next.
As a new venture, the company has started a profile picture project called "New Star Galverse" in collaboration with Zombie Zoo holders. NFT celebrities such as Joichi Ito and Mandy Sekiguchi, and Mark Zuckerberg's sister Randi Zuckerberg, all own Galverse.
Based on the Web3.0 term WAGMI, which means we will do well, WAGMA, based on the slogan "We're all gonna make an Anime," opened daily sales to various communities, conveyed the appeal, conveyed all the context to various places, and sold 8,888 units. There is a separate artist who paints, and I am in charge of concept work.
They hold a fan art called the Gal Verse Art Festival, and 250 fan artworks are gathered from all over the world. Fan Art Con testing is not just a secondary creation, but like many NFTs, it recommended that the holders of Gal Verse "create an NFT about Gal Verse and make it profitable." Although it is not known in the NFT community yet, people who want to challenge art create art of Gal Verse and buy it. It is the royal road of NFT to liven up fan art and move it as a fan economy.
I feel that there is a big Issue in IP protection and anti-fraud measures in the Web3.0 area, and there are quite a few fake NFTs on display. For example, there are many NFTs that trace a picture of Ghibli and sell it under a different name, and there are cases where overseas people who believe that it was made by Ghibli buy NFTs. I feel that the Japanese side needs to recognize this.
Although it has not occurred in Japan yet, there is a fraud project called Rug pull in which the operator runs away with money when it is collected. If there are many fraud projects, the entire NFT may be suspected. This is the opinion of operators such as DeFi, NFT, and DAO, but their literacy is low, partly because the development of information to improve Web3.0 literacy, such as what is legally problematic, has not caught up. Therefore, it is difficult for creators to participate, and there is a high possibility that they will be deceived by fraud. Therefore, it would be appreciated if an environment could be developed for people who want to start new things.
Through the second creation of Galverse, testing, etc., there are many wonderful artists, but I feel that there are very few people who challenge overseas, and it is desirable that such people increase a little more. I would like to promote efforts such as the development and incubation of artists together under the leadership of the government.
Another idea is that there is room for the whole NFT to be considered a scam, so it would be good to have a certification program for government agencies and industry groups.
This time, we interviewed various people in the Japanese organization of NFTs to sort out the Issue points. Many opinions were expressed that they did not know what was a legal problem as a business or that they did not know whether they fall under the category of crypto assets if they issue multiple NFTs with the same appearance.

The following remarks were mainly made in the questions and answers from the members and in the response from Mr. Kusano.

Member: In terms of NFT, I think it is at the beginning of creating a sustainable ecosystem, and I was caught in the middle of wanting the government to do an NFT certification project. In his first remarks, he said, "Creators and users spin stories together," which is a wonderful phrase, but I don't think it is the government's job to classify fraud and non-fraud and perform certification and rating. In other words, I think he is saying that he will give some kind of endorsement to government certification, but I think this Web3.0 movement, including blockchain, is a kind of permissionless innovation, which is a world view that is extremely important.
Government certification could allow creators, users, and the government to weave a story together, which is probably different from the world view you want to create. As with other cases, fraud requires the involvement of the police and the judiciary, but if this is not tackled more carefully, it may turn out to be the suicide of permissionless innovation, the opposite of the direction that permissionless innovation was aimed at.
Member: It is actually a big monetization point in terms of paying for trust when it comes to perpetuating this ecosystem, and it would be a waste to give this point away to the government. I believe that creating authentication technologies and mechanisms that are user-driven and with the cooperation of creators will strengthen this ecosystem to its original ideal.
Member: For example, in the case of NFTs and crypto assets, methods such as fraud appear on Twitter unexpectedly quickly, and users who see them detect them quickly and spread the information. User-driven and self-cleaning technologies such as RegTech and SupTech may be able to respond faster and defend themselves better. By equipping user-driven and self-cleaning technologies such as RegTech and SupTech, it may be good to move forward in the direction of perpetuating the Web3.0 ecosystem. I would like to hear your opinions on the direction of this, including the creation of such partnerships.
- Speaker: people does not increase, it will be difficult to create an ecosystem. From a sensory point of view, there are few people who talk about fraudulent projects as fraud, and I feel that it has not spread. In addition, I have the impression that there are no people who translate even if it is talked about as fraud in overseas news. I felt that it may not be government certification, such as cultivating technology to eliminate fraud.
Member: Broadly speaking, I would like to ask two questions.
Member: First of all, as a legal issue of concern, in what specific areas are you worried or concerned? Is it about the posting of fraudulent content and the licensing of copyrights? In fact, in the world of Web3.0, I would like to ask what legal Issue I should be particularly careful about. If there is a trouble with foreign people, it may develop into a story about which country's law will be applied and which country's jurisdiction will be applied, so I would like to ask what kind of mechanism is good as a means of dispute resolution if you have any idea.
Member: The second point is the same as the previous point that if the government is involved in authentication, a desirable world view will not be realized. However, even if the government is not involved in authentication, is there a method to create an authentication mechanism led by private sector in order to maintain the credibility of the content to a certain extent? At that time, it is necessary to discuss who will authenticate what and what will be authenticated at what stage. For example, would it be desirable to have a mechanism similar to a fake news fact checker to ensure the credibility of the content? What specific mechanisms should be used to ensure the credibility of NFT before putting it on the market?
- Speaker: It's a very difficult problem, and something like NARUTO NFT has come and gone many times. When a fraudulent NFT was issued, CAPTAIN Tsubasa tweeted in English and Japanese that it had not officially issued the NFT. When an NFT called Juvenile Junk, which is similar to Shonen Jump, was issued, Open Sea responded as soon as the publisher reported it. It doesn't even consider measures to ensure the credibility of the content, such as which law will be applied to the case.
Member: scams are different, in the era when more than 90% of emails were spam at one time, there was a move to create a law, but many ventures created spam prevention technology, platformers decided on various standards, and in the end, private sector was able to fix it without passing a bold law. This time, although it is a little behind the speed of NFT, there will be companies like this that prevent forgery, and I think that features such as preventing platforms and marketplaces from minting fake goods and similar content in the first place, and determining whether or not a thing is fake when buying it, will be appearing one after another. Everyone is making these to make money, and platformers don't want to be sued, so they are working hard to increase such functions. This is a global rule, and we don't know about it, but basically, if you have stolen goods, the person who bought them is responsible even if they don't know it. This is true of platforms, of course, but the art industry can also claim that you have stolen works. In other words, if NFT is supposed to be fake, the buyer also has some obligations. Since NFT is not actually distributed, it is a little easier to apply various laws in the real world, and I think if laws like RegTech and new technologies are combined, various things can be done. Certification and KYC require the opinion of the government, so it is desirable for private sector companies, the government, artists and users to clean up by raising issues and discussing them like this study meeting.
Member: Another point is that when such things flow across borders, it is impossible to do so under national laws, and we may end up relying on the rules of the platform. We may end up in a world where national control does not work.
Member: There are two points. One is that the government is slow in responding to the law, so if we create a law when various things are rapidly changing right now, there is a possibility that it will slip, so we don't create a national law in a hurry. Second, it is good for NFT to pay royalties to artists, but recently there have been platforms that do not need to pay royalties, and I feel that the trust relationship between platforms and artists has been betrayed. There is no law that requires NFT royalties to be paid. When a group discussed whether a platform is a bad actor in a decentralized system, an interesting story has emerged about governance, which is who polices and what kind of ring to talk to. Whether it can be left to platformers or whether it will be a best practice if it is left to market principles, is exactly what is asked, and I would like to hear your opinions.
- Speaker: NFT, but there is a lot of discussion about its utility, and it is not just a JPEG, but it is seen as a way to earn coins by staking it or to resell it. However, it is desirable that the largest utility of NFT art itself is to enjoy art and to increase the number of people who buy it with expectations for their next work, like crowdfunding for artists. If it is not returned to artists, there will be fewer people who buy it.
- Speaker: Right now, we are still in the middle of exploring various ways to use NFT, and when people from other industries come in and think about what the royalties are actually for, I think it is desirable that what is returned to artists remains.
Member: artists. While thinking about how to support creators as a financial institution, I am wondering what exactly should be done to make artists happy. It is said that the development and support of NTF artists who can play an active role globally are still insufficient, but what are the expectations of public institutions, finance, and investors?
- Speaker: NFT project and NFT, I think that the development of information is necessary first. It is also necessary to do education on how to start it. It is desirable to create a mechanism that matches people who are interested in marketing or crypto with people who can draw pictures, such as incubation, which is easier for people who only draw pictures to challenge.
- Speaker: Agency for Cultural Affairs and in existing services in the art field. Thanks to the start of NFT, some people have become able to eat only with art without client work. If we can create an environment in which such people can be close to each other and stimulate each other, such as by using Google Translate, there will be more people who will take on the challenge.
Member: NFT and to improve their literacies. I would like to ask what measures the Agency for Cultural Affairs is considering.
Member: Agency for Cultural Affairs' support for the development of young creators, for example, support is provided for projects that adopt advice from experts, support for development such as the provision of technology, and support for production costs. At present, there is no support limited to NFT, but in the future, I think it is very important to create scenes in which more artists are active while utilizing NFT, so it is necessary to improve it from now on.
- Speaker: Web3.0 and create projects like Galverse for overseas, so if we can match such people with artists, it will be more accelerated.
- Speaker: NFT will think about how to get the user to hold the NFT after selling the picture, but I think people who touch Japanese content by adding game characteristics are good at it. In anime and manga, the top NFT should be extremely popular, such as anime inspiration, so I hope that if Japanese teams are recognized as strong in overseas NFT markets, the world will change at once.
Member: As a premise, if a work is linked to NFT, it will be protected in the same manner as ordinary works in general. On top of that, what rights can be obtained regarding content through NFT transactions depends on the terms and conditions of use of services such as NFT Market and contracts between individuals. In this case, it is of course important for both parties to confirm in advance, and it is important to spread and raise awareness so that the basic parts are thoroughly understood.
Member: In fact, this story has just begun to run, and at this point in time, there are still places where use cases has not been organized and made easy to understand. At this point in time, it is important to accumulate the matter of clearing it while looking at specific cases.
Member: There is an environment in which Japanese people can take on challenges in overseas markets, but what kind of image does the overseas market have? If it is just to create an NFT and put it on Open Sea, I don't think there is an overseas market or the Japanese market, but in the end, it will reach the community and make it popular, or in the process of spreading from the NFT to various media around it, is it an image of overseas rather than doing it only in Japan? I would like to know what the overseas market is, what is currently lacking, and what kind of things would make it possible for Japanese people to go overseas.
- Speaker: means that it is an English-speaking country. I think the United States is the main country that was able to sell all of the Galverse, but I think it is largely because people who communicate in English and people from the mainstream Western countries buy NFT.
Member: There are no exact figures, but from my personal experience, the U.S. has by far the most. The U.S. is now trying hard to do regulation, but even when I look at the projects, I think 80-90% of them are English.
- Speaker: Trends are changing rapidly due to linguistic hurdles, and there are quite a few things that cannot be sold unless they are sold in this way. When I first started NFT, there was a time when NFT sales were sold without a roadmap showing what to do with NFT sales, but now it has become a culture where a roadmap must be issued. In Japan, it is difficult to catch up with changes.
Member: I think that NFT, represented by Open Sea, has started to offer models as a place to sell one piece of art or to sell experiences. But for novels, it is completely meaningless to sell just one piece, and it is better to sell 10,000 pieces for 100 yen than to sell one piece for 1 million yen. Have you heard of a market for NFT or a market to use NFT in which the number of copies can be used in a form that is better to increase anyway? In addition to novels, it is possible to sell the experience of performing music once, but there is also art that has a strong value when copied, so please tell us if you have heard of a means to use it.
- Speaker: Music When releasing NFT, I sometimes fell into the thought of why I should make it NFT and make it a one of-a-kind product even though I want to deliver it widely, but the more NFT iPS spread, the more the value of something like Galverse, which has only 8,000 bodies, increases. The value of Galverse increases when it becomes a TV series and becomes known to people who have not touched NFT, and the value of Zombie Zoo itself increases when Zombie Zoo appears in the news, so it is desirable to consider it as something else. Another point of view is that many people think that NFT holders create new iPS by utilizing the NFT. For example, buyers of the most famous monkey NFT, Bored Ape Yacht Club, use the monkey mark to start a new company or a hamburger shop using the sign. In addition, buyers are often allowed to create and sell goods in second creation if the price is less than 10 million yen. It is good to think that marketing to deliver it widely and the value of NFT are separated and influence each other. For example, a story is spread by second creation of the work by the buyer, and each of the main characters of the work has an NFT, and the person who owns the NFT has a mechanism in which the NFT related to the main character can be received again.

The hearing ended here. The Secretariat explained the efforts to issue digital certificates.

In conjunction with "Digital Day" and "Digital Month," Digital Agency is taking various measures. One of them is the implementation of a good digital award to recognize individuals and organizations that contribute to digitalization. We received a proposal from an expert that this award certificate should be issued as an NFT. This study group is also working hard on how to create a DAO, and I would like to introduce the issuance of a good digital award NFT because I think it will be a reference for future discussions.
Describe the issuance of a digital certificate of merit that combines Verifiable Credentials and non-transferable NFTs.
The system is scheduled to be released this time, but the certificate of the good digital award will also be issued digitally. implementation will issue the certificate in a form that meets the following requirements.
1. You can electronically certify that it is a certificate issued by Digital Agency.
2. By issuing it as an NFT, you can check the award certificate via the winner's wallet.
3. Adopt distributed technologies that are as Web3.0 as possible.
4. Adopt world-standard mechanisms and open technologies.
In terms of user experience, this system allows you to display an image of a certified certificate in the W3C standard format on the site. You can also display this certificate in the form of an NFT on the NFT market by logging in via the wallet we send you.
The technology at the center of this round is called Verifiable Credentials. These are said to be self-sovereign digital certificates that allow online validation of content. It has become a standard proposed by the W3C. In this case, Digital Agency, the publisher, can allow a third party validation holder to validation certificates issued to the holder, that is, the winner. This technology can be confirmed even from a third party site.
This time, we used a technology called Blockcerts for VC implementation. This is a standard for blockchain certificates jointly development by MIT Media Lab and Learning Machine. It conforms to the W3C standard VC standard, and the VC issued this time can be confirmed on other sites such as Blockcerts.
The reasons for selecting these technologies are that they match use cases, are open source, and are used worldwide. In addition, there are several precedent cases in Japan. In particular, the mechanism of Chiba Institute of Technology has been open source, and this was adopted in Digital Agency.
One possible technical background is the use of DID, a distributed ID. It uses a method called did:web to put this ID under the domain to show that it is a certificate issued by a domain in Digital Agency. It then uses the Verifiable Credentials mechanism to enable validation by writing a block on the Ethereum chain saying that it is a certificate issued by this domain.
As for non-transferable NFTs, they are made non-transferable by issuing an NFT from the Digital Agency wallet to the winner's wallet. The metadata in the NFT includes the URL of the validation site for Blockcerts.
We can prove that it is a certificate issued by Digital Agency. This is transferred through the mechanism of Blockcerts and DID. In addition, if it is issued as an NFT, the certificate can be confirmed in the wallet of the winner. This is realized in the form of issuing a non-transferable NFT, transferring the implementation from the wallet of Digital Agency to the wallet of the winner, and distributing the key of the wallet to the winner. In addition, in order to use distributed technology as much as possible, the NFT file and the VC file are placed on top of IPFS, which is a distributed file system. And it matches the global standard mechanism. It uses Blockcerts, which is a self-sovereign certificate recommended by the W3C. It is open source itself, and we used the original one from Chiba Institute of Technology as a reference, but we would like to publish the source code of the mechanism we built on GitHub in Digital Agency.
In addition, during the actual issuance of the certificate, for example, many of the winners still do not have a wallet, the DID file is placed on the Digital Agency site, so if the site runs out, validation will not be possible, and I think it is important that NFT can be referred to permanently, but this time, the content is placed on IPFS, so if the usage fee of IPFS is stopped, Issue will disappear. The public office project is conducted on a basic fiscal year basis, and it is part of the digital day consignment project, so it may disappear sometime next fiscal year at the earliest, so we have begun to consider what to do to prevent it from disappearing. I am working on it while realizing that there are many things that cannot be understood without actually doing it.
The secretariat explained that the next workshop is scheduled to be held on Tuesday, October 25.
The secretariat explained that the minutes of the meeting will be published after the members confirm the content.

End